Running Out of People

The public sector has a major staffing crisis - why has it got so bad and what can be done?

Progress on resolving public sector strikes has been painfully slow. The Government waited until March before even starting proper negotiations to keep them focused primarily on the 2023/24 financial year. Offers have been made to healthcare workers, except doctors, and to teachers. But the teachers will certainly reject their offer and it’s not impossible nurses will do the same, despite their unions urging acceptance. Junior doctors – a somewhat misleading term as it covers most hospital doctors – will be striking again for four days over Easter. Civil servants are walking out on the 28^th April. Headteachers could re-ballot for strike action too. The unrest is a long way from being resolved.

Frustratingly most of the coverage of strikes has focused on whether or not they are “fair” to parents and patients; and internal government squabbles over who will pay for any pay rise. There’s a much bigger question in which Ministers seem alarmingly uninterested – is it enough? Whatever the unions end up accepting may not be sufficient to cope with rapidly growing shortages across the public sector. Fairness is a matter of opinion, supply and demand is not.

A few stats: teacher recruitment last year was the worst ever in terms of meeting targets. This year it’s looking even worse. Schools posted ads for over 81k vacancies last year, a 59% increase in 2018/19, and it’s on track to be higher this year. Almost half of further education teachers are now leaving their job within three years. The number of qualified GPs has fallen by 7% since 2015 despite surging demand. Nurse vacancies are at almost 50k across the NHS. About 10% of all adult social care posts are unfilled (165k). A leaked draft of the NHS workforce plan warns there could be a shortage of over half a million staff by 2036. Nurseries are closing due to lack of staff even as the government propose to expand the sector, with no provision for higher salaries.

In each of these sectors you have a vicious cycle developing: remaining staff come under more pressure as it gets harder to fill vacancies, leading to worsening retention. As the staffing crisis gets deeper, providers have to stop offering services, for instance schools taking non-core subjects out of their curriculum. Quality gets worse as we’re seeing in the NHS, with satisfaction levels now at an all time low. Ultimately provision ceases to be viable at all and you get areas, usually in lower-income communities, with nowhere near enough coverage, as we’re seeing in adult social care and childcare.

So why is this happening, and why is getting so much worse now? And what needs to change to stop the cycle?   

The problem

A simple way to think about the public sector workforce is that you have four core groups:

1.       Low-paid workers who do not need specific qualifications. This includes a lot of people who work for private companies that rely primarily on public funding – e.g. most care homes and nurseries. But it also includes teaching assistants, non-healthcare staff in the NHS like porters, and many local government jobs (whether contracted or in-house). The problem here is nearly all about money in a tight labour market deprived of cheap labour from Eastern Europe post-Brexit. Working in a care home will earn around £11 an hour, in a nursery even less, and often a lot less given they make heavy use of apprentices. Amazon delivery or floor level retail jobs will typically pay more and that gap has grown since the pandemic.

2.       Mass professions that do require qualifications. The main two groups here are teachers (500k in England) and nurses (360k). The police and border force are in-between as they do require A-levels, or an equivalent qualification, but not a degree. As teaching and nursing do require degrees they are competing for recruits against other graduate professions.

Pay is an issue here too, for teachers it has fallen about 15% since 2010 in real terms and for nurses about 7% (which explains why nurses are closer to settling their strike). In comparable private sector jobs salaries are roughly the same as 2010, and again the labour market is tight across the board.  

But money is not the only issue for this group. They are also being put under more pressure. In teachers’ case this is largely because of the cost of living crisis – 18% of families are now food insecure, up from 4% pre-pandemic – and increased failure in other parts of the public sector, such as social work and mental health support. Schools are the provider of last resort for children and so end up dealing with these problems.

Nurses, meanwhile, are dealing with much higher demand, with full hospitals, and particularly intense pressure on A+E and intensive care. Exhaustion and burn-out from the pandemic are rife. Those who worked in intensive care during covid suffered post-traumatic stress disorder at similar levels to soldiers returning from Afghanistan.

On top of all this we have seen a major, and it looks like permanent, post-pandemic change in the way many graduate jobs work, with far more time spent working from home. The number of graduate professionals mainly working from home grew from 15% in 2018/9 to 44% last year. Young people finishing their degrees are well aware of this and most consider the additional flexibility a major plus. Teaching, nursing, policing and so on cannot offer this and, therefore, require a premium above other professions that can.

3.       Elite professionals. There are a smaller number of public sector jobs that pay a “top 10%” salary. This includes headteachers, hospital consultants, and senior civil servants. Only a small proportion of teachers become heads, so the prospect of a much higher salary doesn’t act as much of a recruitment incentive at the bottom of the pipeline. But for junior doctors and fast stream civil servants the expectation would be that they would move into a well-paid role eventually, even if their initial salary isn’t great.

As such recruitment for these roles is not, currently, a problem. Medical schools remain oversubscribed, as does the fast stream.

That doesn’t mean there aren’t any issues though. First pay pressure creates a serious social diversity challenge. The prospect of a good salary long-term is fine if you can be funded by the Bank of Mum and Dad in the meantime but not otherwise. Both professions remain dominated by the affluent. More generally the talent pool gets reduced by the lack of early reward. And even though consultants and senior civil servants are well paid, relative to other elite professional jobs that level of reward has fallen significantly, making alternative roles more attractive. This becomes an even bigger problem when burn-out and stress levels rise.

There is a specific problem with doctor numbers in that medical school places are artificially constrained by the Treasury due to their high cost. Demand has risen much higher than the increase in these places – the NHS has 17% more junior doctors since 2019 and 10% more consultants. The only way to square the circle has been a massive increase in non-UK doctors. Almost 11,000 doctors from outside the EU joined the workforce in 2021, up from 5,000 in 2017. This compares to around 8,000 UK trained doctors. This spike in recruitment also meant 50% of nurses who joined the NHS last year were non-EU.

Relying on other countries to train our doctors and nurses is unsustainable given the growing demand for medical staff in those countries and around the world. For doctors medical place numbers can be increased, and Labour is proposing to do so, but there is a long lag time before this has any benefits. Moreover, it puts even more pressure on existing doctors who have to train them. In the meantime we will continue to be reliant on international recruitment, but this makes it absolutely critical we retain as many doctors as possible to limit the risk.

4.       Backoffice professionals. This is a group that often gets forgotten but is critical to the running of public services – the people who make up the finance, IT, HR, and office management teams in school and hospital trusts; local authorities; government departments and so on. This is a really problematic group as they have general skills that are sought after in the private sector, which means good people are always harder to recruit and retain. A recent Treasury advert for their Head of Cyber Security offered a max salary of £57,000, a fraction of what a private company would pay for someone with these skills.

This is particularly critical in the NHS where IT systems are often in need of serious upgrading and high quality analytical management is necessary to cope with complex flows of patients through hospitals. I am working on a longer NHS report at the moment and weakening operational management is an important reason as to why trends were all going in the wrong direction pre-pandemic.

So at every level we have real problems, and there is a toxic mix of different colliding issues. You get the impression from Ministers that they’re just trying to manage this decline until the election and then hand all these problems over to Labour. There’s certainly no public acknowledgement of the scale of this crisis. But what should a government that does want to solve the problem do?

Solutions   

Money: While money is not the only issue there’s no getting around the need for higher pay. This is most acute at the low-paid end. Numerous health experts have told me that if they could only do one thing to help the current crisis they’d up pay for social care workers, as that is the best way to provide immediate capacity to relieve pressure on hospitals. Likewise I don’t see how the government’s proposed expansion of childcare will be possible at current average wage levels. For this group very substantial uplifts in percentage terms are needed to compete with retail. The only alternative would be to open up our immigration system for lower-paid jobs and I don’t imagine either the Tories or Labour will be keen to do that. Likewise re-joining the Single Market.

For more highly qualified roles salary uplifts will be important to rebalance with other graduate professions, especially given the “work from home” premium attached to other jobs. The highest paid jobs also need a bump to widen the talent pool and stop much needed experience draining from the system. The main way George Osborne held the cost of public services down during the austerity years was by freezing pay, but it’s a not a trick that can keep being repeated. At some point it’s too out of whack with the market to be sustainable.

Pensions: the overall reward package for public sector workers is skewed towards pensions over pay compared to the private sector. Psychologically this is unhelpful as we tend to discount financial benefits that are a long way off over. This is especially true for younger graduates who are struggling to pay rent now. This could be rebalanced for new entrants to professions to help recruitment and retention. The overall package needs to be more generous but if there was also a shift from pension to pay it would make jobs like teaching look much more attractive. It could even be offered as a choice, I’m fairly sure most people would take the pay.

Flexibility: One of the many reasons Jacob Rees-Mogg’s crackdown on civil servants working from home was so daft was that it took them out of line with private sector graduate roles and made their jobs less attractive. I doubt he cared but wherever flexibility can be offered it should be, as a free or low-cost way to boost retention. For jobs like teaching and nursing where that is rarely possible then other routes to flexibility need to be enhanced. Minor changes can make a big difference – I’ve been amazed by how many hospitals don’t have rota apps to allow doctors and nurses to easily swap shifts. Or it can be more substantial like those school trusts that have found ways to manage timetabling that allows for more part-time working and job shares. There is a limit to what central government can do here (beyond doing the right thing themselves) and institutions need to find more ways to be creative. Of course that’s easier to do if you’re properly resourced and leaders have time to think.

The small things: One of the regular headlines that pops up in the right-wing tabloids and makes me want to throw things is “NHS spends £X million on diversity managers”. Firstly because it’s always some absolutely tiny amount of money so, even if you thought all these jobs were worthless removing them would make barely a dent to the health system’s budgetary hole. Yet it will regularly pop up in focus groups as if it was a potential major saving.

But the even greater annoyance is, if used right, these roles and other staff-focused jobs can be incredible useful in improving retention. Given more than half of new recruits coming into the NHS are from outside the EU, helping people with language and cultural barriers so they can settle is pretty damn important. Likewise small tokens of gratitude to staff like free teas and coffees or spacious, well-designed staff rooms can make a big difference.

Again much of this is institutional, though the political/media pressure to focus all spending “on the frontline” – which ignores the knock-on effects of less support for frontline workers – doesn’t help. But there has also been an almost complete breakdown in trust between professions and the government that is harmful. I don’t think, at this stage, there is anything the current administration can do to repair this but a new government has an opportunity to show some warmth towards public sector workers.

Technology: I hesitated before adding this to the list, given the amount of eye-rolling I do when reading reports about how tech is going to revolutionise various parts of the public sector. After all schools and hospitals use vastly more advanced tech than a few decades ago but still have more staff. Ultimately caring professions need people. Nevertheless, we are getting near the point where AI could start making a real difference on a wide range of things from admin tasks, to homework marking, to reading medical scans, to identifying when an elderly person has fallen over in their home and needs help. It’s not going to be replacing teachers, nurses and doctors anytime soon but if it could makes their lives 10% easier it might reduce the need for additional staff and help retention.

Beyond technology there is a broader question about productivity, especially in healthcare, where, as discussed in my NHS posts, there is endemic short-termism about spending. If money is constantly pulled out of capital and preventative budgets to fund acute care then that creates a system in which there will be endless pressure to increase staffing. This is exacerbated by manifesto promises to recruits x thousand nurses or police officers rather than ones focusing on outcomes.

The wider labour force: the large number of older people that have left the workforce early has caused the unusually tight labour market we have at the moment. This appears to be a UK specific phenomenon linked to pensions flexibilities making early retirement more attractive, and growing ill-health. This was the main challenge Jeremy Hunt tried to tackle in his budget, but while the OBR think more childcare and benefits changes will make some difference, they will not help much with that older group where the main problem is.

Assuming the government don’t want to take the politically suicidal option of making it financially harder to retire the focus needs to be on health. This takes us back to the economic urgency of fixing the NHS but also to my post on “ordeals” and the deeply flawed disability benefits system. Removing the focus on sanctions and focusing instead on support could make a big difference in reducing labour market pressures, as well as helping people lead a more fulfilling and happier life.

Given many of these issues and possible solutions cover multiple sectors this would be a good topic for No 10 and the cabinet office to do some cross-government work. It’s certainly not happening at department level. The DHSC has put the social care workforce plan on hold and the NHS workforce plan has still not been published. The DfE don’t have a workforce plan for the childcare expansion and haven’t produced anything on schools beyond funding for professional development. The Home Office is a general disaster zone. DWP still seems wedded to sanctions. It’s the sort of thing that needs Prime Ministerial grip. Maybe once No. 10 have finished on critical issues like banning laughing gas and buying barges to put a few asylum seekers on they can take a look?